Management metrics dashboard (Ch. 8)

Sector calibration

Company sector

The traffic-light thresholds (green/yellow/red) change by sector. Asset turnover of 1.2× is terrible in retail and great in manufacturing.

Sector

Referências médias, sem viés setorial

Traffic-light legend:Green: within the sector targetYellow: caution, close to the limitRed: outside the sector standardGray: not enough data

Balance sheet

Amounts in BRL, from your latest close. Fill in what you have — the dashboard only lights up metrics with enough data.

Current assets

Cash + receivables + inventory + …

Cash and equivalents

Inventory (balance sheet)

Long-term receivables

Non-current assets

Property, plant & equipment + intangibles + investments.

Total assets

Current liabilities

Non-current liabilities

Shareholders' equity

Latest income statement

Annual figures. If you don't have gross profit broken out, leave it blank — we use Net revenue − COGS.

Annual net revenue

Annual COGS

Gross profit (optional)

Operating profit (EBIT)

Before interest and taxes.

Net profit

Effective income tax rate

Used in NOPAT for ROIC. Defaults to 34% if blank.

Block 1 · Section 8.3

Liquidity

Can the company pay what it owes in the short term?

Current ratio

AC / PC · Verde ≥ 1,5 · Amarelo 1,0–1,5 · Vermelho < 1,0

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Quick ratio

(AC − Estoques) / PC · Verde ≥ 1,0 · Amarelo 0,7–1,0

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Cash ratio

Disponível / PC · Verde ≥ 0,30 · Amarelo 0,15–0,30

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Overall liquidity

(AC + RLP) / (PC + PNC) · Verde ≥ 1,2

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Block 2 · Section 8.4

Leverage

How much third-party capital carries the company's structure.

Total debt to assets

(PC + PNC) / Ativo · Verde ≤ 50% · Vermelho > 70%

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Debt composition (short term)

PC / (PC + PNC) — vencimento curto · Verde ≤ 40%

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Fixed assets to equity

ANC / PL · Verde ≤ 60% · Vermelho > 100%

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Debt to equity

Passivo total / PL · Verde ≤ 1,0

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Block 3 · Section 8.5

Margins

Is the company working hard for very little?

Gross margin

LB / RL · Verde ≥ 35% · Amarelo 20–35%

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Operating margin

EBIT / RL · Verde ≥ 12% · Amarelo 5–12%

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Net margin

LL / RL · Verde ≥ 8% · Amarelo 3–8%

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EBITDA margin

EBITDA / RL · Verde ≥ 15%

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Block 4 · Section 8.6

Operating efficiency

Where cash gets stuck — and how hard the assets work.

Asset turnover

RL / Ativo total · Verde ≥ 1,5

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Cash conversion cycle

PME + PMR − PMP · Verde ≤ 15 dias · Vermelho > 45

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Days inventory (PME)

Estoque médio × 360 / CMV

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Days receivable (PMR)

Contas a receber × 360 / Receita bruta

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Days payable (PMP)

Payables × 360 / Purchases · the higher, the more your supplier funds you

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Block 5 · Section 8.7

Returns

Is all that effort paying off?

ROA — Return on assets

LL / Ativo · Verde ≥ 10%

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ROE — Return on equity

LL / PL · Verde ≥ 15% · compare com Selic + prêmio

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ROIC — Return on invested capital

NOPAT / capital investido · Verde ≥ 12%

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Section 8.9

The 7 metrics no business owner can ignore

If you can only look at 7 numbers once a month, look at these.

1 · Current ratio

Can you pay what comes due this year?

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2 · Total debt to assets

How much of the assets belong to others?

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3 · Net margin

Of what comes in, how much is actually left?

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4 · EBITDA margin

Operating cash generation.

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5 · Cash conversion cycle

Days your cash stays stuck.

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6 · ROE

The return on your own money in the business.

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7 · ROIC

The return of the operation, without leverage.

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Reading guide

How to read the metrics dashboard as a whole

Three fictional scenarios so you can practice reading the results before looking at your own numbers.

Green

What to look at: Current ratio ≥ 1.5, ROIC above the cost of capital, and leverage under control (< 50%).
What it means: The operation generates real returns and the capital structure isn't stretched — growth is sustainable.
Next steps: Allocate cash to projects with ROIC ≥ current; pay dividends under a clear policy; consider expansion.

Yellow

What to look at: High ROE driven by debt (ROE >> ROIC) or mid-range margins with tight liquidity.
What it means: That pretty return partly comes from leverage. An interest-rate shock or margin drop knocks the result down.
Next steps: Cut interest-bearing debt, prioritize turnover over volume, and reprice your lowest-margin products.

Red

What to look at: Liquidity < 1, leverage > 70%, or ROIC below the cost of debt.
What it means: The company destroys value: the operating return doesn't pay for the money it uses.
Next steps: Cut non-essential capex, renegotiate debt, shut down product lines that burn capital without return, and revisit the model.

Quick quiz

Did I really understand the traffic light?

3 quick questions based on the guide above. Answer and see the correct answers right away.

1ROE of 25% and ROIC of 8%. What does that combination usually indicate?
2Current ratio = 0.8. How should you read it?
3ROIC below the company's average cost of debt. What does that mean?

Answered: 0/3

Go deeper in the book

Chapter 8 — Management accounting

The book brings all 5 blocks with real examples so you can interpret every indicator.

Buy the book →

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